Northwise Project
Fundamental Investor, AI, Fintech, E-Commerce & Emerging Markets
AMD's bullish hardware case depends on realized GPU prices and costs, not shipments alone: lower selling prices need not lower manufacturing costs. In a conditional September 23 model stress, GPU prices 15% below the reference path with fixed unit costs cut weighted 2030 revenue from $347.84B to $314.76B and free cash flow from $90.13B to $68.59B, about 24% lower. These are weighted outcomes across 16 scenarios, not the standalone Base case. x.com
AMD's larger AI orders can tie up cash before customers pay, as supplier commitments become inventory and delivered systems become receivables. The September 23 Base forecast has $26.74B of normalized 2027 net income but only $12.40B of free cash flow as growth needs working capital and equipment. Collections and inventory must keep pace; the conditional 2030 forecast has $116B operating cash flow less $19.58B cash capex, leaving $96.42B free cash flow. x.com
On-the-ground data, including OCP rack vendors' reports of what they hear from customers, gives a clearer picture of AMD's CPU outlook. AMD's CPUs and GPUs are both in a growth cycle, leaving it on track to outgrow the market. The 14 million GPU figure through 2030 was always above the team's models, as it was for many others; the 2027 GPU sales estimate raised in the discussion was Morgan Stanley's, not theirs. x.com x.com x.com x.com x.com
AMD's secured wafer supply from TSMC and ramping MI450 demand undercut Morgan Stanley's 43% cut to its AMD GPU demand forecast, especially while it leaves Nvidia's forecast untouched. The market is not buying the downgrade. x.com
Morgan Stanley's sharp cut to AMD's GPU demand forecast raises downside risk, though its original sales estimate may simply have been too high. The bank cut its 2026-30 forecast from 14.1 million to 8.0 million units, or 43.3%, while leaving Nvidia's unchanged. AMD was called to fall 60% when the market opens. x.com
Agentic AI demand should drive AMD's 2027 data-center growth well over 100% year on year. Server CPU revenue is forecast to double, with over 5 million Venice units shipping in 2027; Helios racks should ramp mostly in Q1 2027, with over 20,000 expected that year, while MI450/455X volume remains limited by end-2026. Projected 2027 sales are $103bn, with 2027 EPS revised up 15% and a new $720 target at 40x 2027 earnings. x.com
SK hynix's record earnings and five-year volume and spec agreements make its valuation look too low. Quarterly revenue reached KRW104.62T, up 32%, and operating profit hit $63B against a $785B market cap, below AMD's and less than half Tesla's. Its planned KRW100T (~$75B) shareholder return would be one of the world's largest, signaling conviction and unusual demand visibility. AI-inference 3D DRAM is coming by 2030; a reasonable valuation is all that is sought. x.com x.com x.com x.com x.com … Show more
Insufficient substrate supply may cap AMD's growth because the company has not secured enough capacity. The author says limited substrate availability drove AMD's lowered guidance, making supply-chain execution the constraint on how far it can grow. This adds an execution risk to the earlier concern that AMD is too expensive to buy despite strong results. x.com x.com
AMD's growth worries should ease after BofA raised its EPS estimate by 34%, to about 4x current levels, which also addresses concern that the stock trades at a premium. x.com
ASE Technology's packaging tightness now extends beyond AI to analog and mature-node chips, supporting price hikes. Lead times are up over 30%; FC/Wirebond/QFN hikes of 10–80% and CoWoS hikes of 10–20% are expected in 3Q–4Q26. Higher AMD server CPU wafer allocation, CoWoS adoption for Venice, Verano and future AMD CPUs, and limited competition support LEAP growth. LEAP revenue is forecast at US$4bn/$8bn in 2026/27, above guidance. The target rises to NT$843 from NT$754 on 25x 2027E EPS. x.com
AMD and Nvidia face a growing capital burden from substrates without the benefit of foundry margin stacking. Each is committing $1 billion to the substrate ecosystem; AMD has also publicly committed $10 billion to its Taiwan supply chain, more than three times its Q2 net income. That capital is unavailable for R&D and product development, while their gross margins are flat or shrinking. Intel's gross margin is growing as customers prepay its foundry for substrates. x.com
AMD's bull case rests on CPUs, not GPUs, and its monster quarter confirms that CPUs are in shortage. The idea that AMD would overtake Nvidia with cheaper GPUs was and still is wrong, but AMD is executing well on CPUs, which makes it a beast. x.com
